Junk Bonds? What of Junk Money?

Naturally the Federal Reserve Board would resist controls on junk bonds, just as it would resist control over their power to create “junk money” out of air by means of bookkeeping entries.

This abuse--and the technique by which our banking system utilizes fractional reserve banking to create vast new wealth on paper--has brought us to the point of international monetary collapse with hundreds of billions of dollars in worthless loans which, on paper, appear to be earning handsome interest payments, but which, in reality, have inflicted grievous hardships upon consumers, farmers, industry and foreign nations.

EDMUND C. STANLEY

Los Angeles